Vietnamese car imports stuck in customs with ministries at odds
Vietnamese car imports stuck in customs with ministries at odds
Vietnamese car importers have been unable to obtain customs clearance for their shipments because of a disagreement between the Ministry of Industry and Trade and The Ministry of Transport counterpart, who refuse to see eye to eye on a set of regulations.
In 2011, the trade ministry issued Circular No.20, stipulating that car importers must obtain two kinds of certification in order for their imports to clear customs.
Car retailers must firstly have an official import authorization from the car manufacturers, and then an additional certificate, issued by the transport ministry-run Vietnam Register, to prove they have a standardized facility for car maintenance and repairs.
Vietnamese car importers had been able to follow Circular No.20 without issue until the middle of this year, when the transport ministry said they would no longer issue their own certificate.
Under the new Law on investment, effective since July 1, the importation of motor vehicles is no longer a conditioned business, meaning that importers will no longer have to meet as many conditions, including obtaining the Vietnam Register-issued certificate, according to the transport ministry.
The situation gets more complicated for car importers when the trade ministry, despite the position of its transport counterpart, insists that businesses must still have both papers or risk shipments held at port without customs clearance.
Victims lament
One victim of the two ministries’ conflicting views, Nguyen The Hung, chairman of Kylin, a company specializing in importing South Korean cars, has detailed his experience to Tuoi Tre (Youth) newspaper.
In early September, Kylin placed a US$1 million order for 50 new cars from a South Korean manufacturer, but was unable to clear customs once the imports arrived in Ho Chi Minh City.
Kylin had already obtained a certificate to prove they had a standardized maintenance facility, but it had expired at the same time as the imports had arrived.
However, when Hung attempted to renew his certificate, he was told that the transport ministry no longer issued the paper.
“But the trade ministry said I still need that certificate to complete customs clearance,” he said.
Another victim of the confusion, Vu Huy Chinh, from the Nam Son Auto Co. Ltd., has also found himself in the same situation, ending up ‘borrowing’ the certificate from another importer in order for his shipment to clear customs.
Chinh paid nearly VND100 million ($4,464) for a three-year certificate with only eight months of validity remaining, and said he could no longer accept such a temporary solution.
“If the hardship continues, the car import market will be frozen,” he said.
Ministries remain in dispute
A Vietnam Register representative told Tuoi Tre that the agency used to certify car businesses as having standardized maintenance and repair facilities pursuant to the transport ministry’s Circular No.19. which took effect in August 2012.
However, in July 2016 he said the circular was scrapped as the new Law on investment came into effect, and the Vietnam Register stopped issuing the certificate.
“We know some car importers had trouble with the certificate, but we must obey the new law,” the representative said.
In the meantime, the Ministry of Industry and Trade have said that it may waive Circular No.20, but only after the government issues a similar regulation requesting that car importers have standardized maintenance facilities.
Tuoi Tre has sent a document to the trade ministry, asking if they have a temporary solution to assist businesses whose car imports remain held at ports because they lack the necessary certificate, but have so far received no response.
The General Department of Vietnam Customs is also in a dilemma over the issue. While it acknowledges the difficulty of car importers, the customs general department still has to ask for the controversial certificate as long as Circular No.20 remains in effect.
Vietnam Customs did ask the trade ministry if the circular is still effective, and was told that the ministry is reviewing the regulation but has yet to officially abolish it.
This effectively means that car importers must still obtain both papers in order to clear customs.
From July 1 to October 15, 34,110 foreign cars have completed customs clearance, while 1,440 others, collectively worth $39.55 million, are being held because they lack the necessary papers, according to customs data.
